Albania: Albanian parliament amends Law on Tax Procedures

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Dorina Asllani Ndreka

In November 2016, the Albanian parliament approved a large
number of changes in one of the main laws regulating the
activity of the tax authorities in the country, the Law on Tax
Procedures.

The amendments affect several aspects of the tax
authorities' procedures and mainly focus on, among other
issues, transparency, increasing electronic communication
between taxpayers and tax authorities, improving fiscal
consequences for passive taxpayers, deregistration procedures,
facilitating instalment payments already provided for by the
law, self-correction of the tax declarations and the appeal
process.

The amending law entered into force on December 1 2016.

As far as transparency is concerned, to guarantee a
transparent and impartial tax administration, the changes
oblige the general tax director to make public any decision
taken within five days of its issuing. This is to be applicable
to decisions that taxpayers request about the official position
of the tax administration regarding the interpretation and
implementation of the law in the specific circumstances of the
taxpayer. The taxpayer data, however, are to be kept
confidential.

Another step towards transparency is also the obligation of
the general tax directorate to publish (on a six-month basis)
informative bulletins that will include final decisions of the
Administrative Court of Appeal, Supreme Court and
Constitutional Court, regarding tax issues, in order to inform
the taxpayers and to unify the practices.

An additional important change that the law has introduced
is the establishment of detailed and specific rules about the
instalment tax payments procedure. In case the taxpayer faces
financial difficulties, which prevent him from meeting his tax
obligations on time, he is allowed to conclude an agreement for
the payment through instalments. The taxpayer must demonstrate
his financial inability to pay the tax obligation in full, and
show that despite the financial issues, the company he
represents will be able to comply with its legal obligations in
the future.

The instalment payment agreement is done in writing, within
10 calendar days from the request submission. This agreement
can be concluded only in cases where the taxpayer agrees to
settle immediately at least 20% of the tax obligations, for
which the agreement is concluded. The tax authorities can
stipulate instalment agreements on tax obligations regarding
tax assessments performed under Article 68 of the Tax Procedure
Law, or self-declared tax obligations, with the exception of
tax obligations that are withheld by the taxpayer, including
social and health insurance contributions. In case the tax
authorities have initiated the compulsory collection of the tax
obligations, the mortgage or any other legal enforcement on the
assets of the taxpayer shall not be removed. However, the
taxpayer that has concluded an instalment agreement has the
right to request the withdrawal of the order to seize bank
accounts. The initiation by the tax authorities of the
mandatory auctions of the taxpayers' assets, in order to
achieve the legal enforcement of the tax obligations, impedes
the conclusion of the instalment agreement.

The instalment payments option is not a new provision, but
the new law gives specific details, making it more applicable
in practice. If this method is applied on a large scale, it
will help taxpayers that are in difficult financial situations
and will increase the likelihood of tax collection.